Granite Suing Over Two WB Affils

After seeing sales for two of its WB stations fall through in the wake of The WB and UPN shutdowns, Granite Broadcasting is suing The WB and CBS Corp, co-owners of The CW, for breach of contract and unspecified damages.

The suit, filed in the Court of the Chancery in Delaware, alleges that WB breached the affiliation agreements for Granite's WDWB Detroit and KBWB and negotiated in bad faith when Granite signed affiliation renewals last September.

"The WB breached its agreements, reneged on its promises and/or its representations turned out to be false," the suit says, according to court documents. As a result, the stations value has been "significantly compromised", it continues, leaving the stations "orphans in the television broadcast industry."

Those extensions, Granite says, were key to its $180 million deal to sell the two stations. That deal, to AM Media, fell through after WB and CBS announced in January that WB and UPN would shut down in September and merge into The CW. Granite recently found a new buyer for teh stations, but at a reduced price of $150 million.

In the lawsuit, Granite contends that the WB closure lessened the value of its stations and caused losses in revenue and other business opportunities. The company says it also made a $22.5 million payment to The WB to extend its KBWB's affiliation.

When AM Media balked at its deal in February, it sent ripples across Granite. The company warned that it was running out of cash to service its debt. It also had to walk away from a deal of its own to buy a station in Binghamton, N.Y., that was to be funded by proceeds from the two WB stations.